A valuation of Tata Consultancy Services (TCS) built from its filed accounts — ten years of results, the method that fits this business, and what today's price already assumes.
Worked backwards from today's share price: the growth Tata Consultancy Services must sustain to justify what it costs, against what its own record supports.
Even zero revenue growth justifies more than the current price under the base assumptions — the market appears deeply pessimistic versus the ~7% growth the fundamentals support. That is a classic deep-value setup IF no structural impairment is being missed; it can equally mean the market knows something the model's inputs don't. Across plausible assumption draws, the price is consistent with growth in the 0%–0% range (P25–P75; P5–P95: 0%–3%). The same price is consistent with ~0% growth if margins compress 300bps, or ~0% if they expand 300bps — growth and margin trade off; there is no single 'right' implied number. Note: data confidence is MEDIUM — treat the ranges, not the midpoints, as the signal.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit as filed, in ₹ crore.
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| Mar 2017 | 1,17,966 | 26,357 | 22.3% |
| Mar 2018 | 1,23,104 | 25,880 | 21.0% |
| Mar 2019 | 1,46,463 | 31,562 | 21.5% |
| Mar 2020 | 1,56,949 | 32,447 | 20.7% |
| Mar 2021 | 1,64,177 | 32,562 | 19.8% |
| Mar 2022 | 1,91,754 | 38,449 | 20.1% |
| Mar 2023 | 2,25,458 | 42,303 | 18.8% |
| Mar 2024 | 2,40,893 | 46,099 | 19.1% |
| Mar 2025 | 2,55,324 | 48,797 | 19.1% |
| Mar 2026 | 2,67,021 | 49,454 | 18.5% |
This business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
Discounted cash flowThe same valuation, run side by side.
Tata Consultancy Services vs InfosysThe two largest Indian IT services firms, on the same cash-flow model.→Tata Consultancy Services vs HCL TechnologiesSimilar mix, historically a different margin profile.→Tata Consultancy Services vs WiproThe third of the large-cap IT set, on a smaller base.→At ₹2,366 the market is pricing in roughly 0% sustained growth, against the ~7% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
A price-to-earnings of 15.9 and price-to-book of 7.99 sit against a return on equity of 51.8%. Whether that multiple is deserved depends on how durable the return is — which is exactly what the valuation tests.
Revenue went from ₹1.18 lakh crore to ₹2.67 lakh crore over the period shown, while return on equity moved from 30.1% to 48.4%. Growing scale on a rising return is a very different proposition from growing scale on a falling one.
The dividend yield is 2.71%, which is a meaningful part of the total return.
Debt to equity stands at 0.11, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.
From published financial statements. The method is chosen to fit the business — a bank on excess return, a regulated utility on its rate base, a conglomerate by its parts — and every assumption is shown with its source. When the numbers do not support a call, no call is published.
A cost of capital of 10.46%, growth drawn from the company's own record rather than from guidance, and the valuation method that fits the business. All of them are listed in the report, with how much each one moves the answer.